Oil down as US crude inventories swell, traders worry about China-US trade
Oil prices fell more than 2% on Wednesday as a large build in U.S. crude and gasoline stockpiles signaled weaker demand, while worries about a new China-U.S. trade war fueled fears of softer economic growth.
Brent crude futures settled down $1.59, or 2.09%, to $74.61 a barrel. U.S. West Texas Intermediate crude was down $1.67, or 2.3%, to $71.03.
U.S. crude oil inventories rose sharply last week, the Energy Information Administration said on Wednesday, as refiners facing soft gasoline demand did maintenance work.
"Refiners just don't have a call for crude right now," said John Kilduff, a partner at Again Capital in New York. "They're racing into maintenance, given the slack demand we're seeing for gasoline," he added.
Concern over a new trade war between the U.S. and China, the world's largest energy importer, also pressured prices.
On Tuesday, China announced tariffs on imports of U.S. oil, liquefied natural gas and coal in retaliation for U.S. levies on Chinese exports, pushing WTI down 3% at its session low, the lowest since Dec. 31.
"China putting a tariff on U.S. imports reduces the demand for those commodities, which need to be redirected into another market," said Andrew Lipow, president of Lipow Oil Associates.
On Wednesday, Iran's President Masoud Pezeshkian urged OPEC members to unite against possible U.S. sanctions, after Trump said he would restore the "maximum pressure" campaign on Iran that he enacted in his first term.
Source: Reuters
